The 16th BRICS Summit in Kazan, Russia, concluded on October 23, 2024, achieving significant milestones for the bloc and its leaders. The Kazan Declaration addressed key issues such as equitable global governance, peace-building, and enhanced cooperation among Global South nations.
Outcome of the Kazan Declaration:
- Among the agreements, the push for an interbank cooperation mechanism, a grain exchange, a cross-border payment system and insurance company, and growth of the BRICS New Development Bank, indicate the intent to seek alternatives to the prevailing international governance structures.
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Significance of the BRICS Kazan Meeting
1. Russia’s Strategic Gains
- Hosting the BRICS Summit was crucial for Russia amid Western isolation following its invasion of Ukraine.
- Western sanctions and an International Criminal Court (ICC) arrest warrant limit President Putin’s ability to travel, making Russia’s role in BRICS even more significant.
- The summit allowed Putin to demonstrate Russia’s resilience and global influence, reaffirming that many nations, especially in the Global South, continue to value its strategic and economic contributions, such as energy resources and defence supplies.
- By hosting BRICS, Russia asserted its relevance in shaping a multipolar world order, countering the Western-dominated status quo.
2. Successful Institution Despite Differences
- Many Western experts argue that BRICS is too diverse to be cohesive. The group comprises democracies, authoritarian regimes, and monarchies, and its members do not share territories, cultures, or political systems.
- The economic disparities are also stark:
- China’s GDP is around $18 trillion, while India’s is less than $4 trillion, and South Africa’s is under $400 billion.
- China’s economy is larger than the combined GDPs of all other BRICS nations.
Despite these differences, BRICS nations have shown they can set aside their disparities, focusing on common interests through annual summits and successful institutional collaborations.
3. Economic Impact and the New Development Bank
- BRICS has established institutions that promote development and self-reliance, with the New Development Bank (NDB) as a key example.
- Founded in 2015, the NDB has funded over $30 billion in development projects, providing financing that aligns with the priorities of Global South countries.
- This approach enhances BRICS’ credibility and influence.
- Notably, BRICS heads of state have rarely skipped the Summit, demonstrating commitment even amid challenges like the India-China border standoff and the ongoing Russia-Ukraine war.
- While BRICS’ achievements over the past 15 years are modest, they are still significant.
4. Political Impact
- Presence on the Global Stage: BRICS has successfully established its presence on the global stage, becoming an influential bloc in international politics.
- Counterbalance to Western Institutions: The West is concerned about the emergence of a rival to the G7, which could disrupt the functioning of the G20. While primarily an economic grouping, BRICS has actively addressed political issues, consistently highlighting discrimination and hierarchy in the international system.
- Its members feel underrepresented in institutions such as the UN Security Council, IMF, and World Bank, where Western states continue to hold disproportionate influence.
- As articulated in the Kazan Declaration, BRICS seeks an overhaul of these institutions to address biases, advocating for either necessary reforms or the establishment of alternative rival institutions.
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India’s Specific Importance
- Prime Minister Modi’s presence at the Kazan Summit reaffirmed New Delhi’s commitment to both BRICS and Russia.
- The summit was significant for geopolitical balancing and strategic manoeuvring. An unexpected outcome was the agreement between Beijing and New Delhi to resolve the border dispute in Eastern Ladakh just hours before the summit.
- This agreement led to a formal meeting between Modi and Xi, potentially signalling a new phase in their bilateral relations, at least for the near future.
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Expansion of BRICS
The expansion of BRICS reflects its growing appeal among non-Western states, with nearly three dozen countries from the Global South expressing interest in joining the bloc. In a significant move during the 2024 Kazan Summit, BRICS approved five new members, marking a historic “big-bang” expansion.
New Members and Participation
- The Kazan Summit hosted the first-ever meeting of BRICS+, with leaders from Egypt, Ethiopia, Iran, and the UAE participating.
- Saudi Arabia’s foreign minister attended the summit, although the country has yet to formalise its membership.
The inclusion of new members brings both advantages and challenges:
Pros
- Economic and Political Clout: Most of the new members are oil-producing and Islamic states from West Asia and Africa. Their addition will significantly enhance BRICS’ economic and political influence.
- Energy Cooperation: BRICS+ now represents a balance of top energy-producing and consuming countries, potentially creating a favourable environment for future negotiations on energy corridors.
Cons
- Cumbersome Decision-Making: The decision-making process may become cumbersome with an increasing number of members. BRICS traditionally operates on a consensus basis, making it challenging to achieve agreement among a larger and more diverse group.
- Countries from the Global South have witnessed the diminishing influence of organisations like the Non-Aligned Movement (NAM) and G77, raising concerns about BRICS facing similar challenges.
- Geopolitical Rivalries:The organisation could reflect the broader rivalries among its members, such as those between Iran, Saudi Arabia, the UAE, India, and China. There is genuine concern that geopolitical tensions in West Asia could adversely impact BRICS’ functioning and efficiency.
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Debate over De-Dollarization and Alternative Payment Systems
- In the context of de-dollarization, Russia is eager to develop an alternative payment system for intra-BRICS trade.
- Following its exclusion from the SWIFT system due to its actions in Ukraine, Russia seeks to create an efficient payment mechanism to facilitate trade within BRICS.
- While BRICS states generally endorse the idea of an alternative payment system, they do not necessarily share Russia’s enthusiasm for it. Notably, the concept of a BRICS currency was not discussed during the Kazan Summit.
- BRICS members support conducting trade in national currencies. Currently, nearly 92% of Russia’s trade with China is conducted in local currencies. Moscow is also interested in expanding this system with India and Brazil.
- However, in cases where trade imbalances are significant, such as with India, repayment in local currencies poses challenges.
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Conclusion
The Kazan Summit solidified BRICS’ status as a critical player in global politics, with its members committed to reshaping the international order to better represent the Global South.
October 25, 2024
